QUOTE(Andavari @ Feb 9 2006, 02:02 PM) [snapback]29535[/snapback]
Run Check Disk in the mode to detect bad sectors, e.g.; do a surface scan.
If you've already did that ignore what I wrote below.
Here's how:
1. Only start this scan if you won't be needing your computer for at least two hours per hard disk.
2. Open My Computer > right click your hard disk > select Properties > Tools > Error Checking, Check Now > Select both options > click Start
...if asked to schedule the scan the next time Windows starts select Yes and then restart your computer immediately.
Should look like this:

Thanks Andavari, although did try that already. Someone with more computer experience than myself suggested repairing IE to fix the defrag utility (even though IE is working properly). I seemed odd to me that doing a IE repair would fix the defrag utility. I can't think of anything else to try except looking at the defrag config in the components folder to make sure that everthing is set to default.
I'll take any further suggestions. Thanks again.